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Bajaj Finance’s Profit & TCNS Clothing IPO

Bajaj Finance Posts Record Q1 Profit

Bajaj Finance (BFL) is entering into the broking and depository business. BFL’s MD Rajeev Jain said this was an extension to their existing loans against securities business. This was a Rs 8,500-crore lending business for BFL and the addition of broking and demat services would grow this business further, with their affluent customer base and a larger share of the client wallet. This foray would also reduce their risk in this business and add to the profit pool, Jain said. He expected this business to grow over the next three to five years. “We deal with HNIs and were lending to them, so offering broking was a natural extension for the company,” Jain said.

Their clients had a portfolio of around Rs 18,000 crore maintained with them in the loan against securities business. For now, the focus will be broking and demat services, but after this was stabilised, wealth management could be the next stop for the company. The BFL board approved this new business foray at a meeting held in Pune on Thursday. The company’s 100% housing finance subsidiary, Bajaj Housing Finance, also become fully operational from February 2018. All new mortgage business was now being done through it and will be included in the firm’s consolidated results. Jain expected the mortgage business to grow to `1,00,000 crore in four to five years. Both these businesses were incubated at Bajaj Finance and built to a certain scale before being pursued as independent businesses.

So while loan against securities is a `8,500-crore business, the housing mortgage company starts with a business of `26,000 crore already. BAFL’s current business as of June 30, 2018 was at `93,314 crore with consumer B2B contributing `19,131 crore, consumer B2C at `17,195 crore, mortgage at `18,919 crore, SME and commercial lending each at `12,000 crore and rural lending at `6,674 crore. Q1 consolidated profit rises 81% Bajaj Finance reported its highest ever quarterly consolidated profit of `836 crore during Q1FY19, which was an 81% jump over the profit in the same period last year. This is as per the new Ind AS accounting standards being followed for FY19.

Under the previous GAAP standards, profits would have been `1,018 crore. Consolidated AUM during Q1FY19 was `93,314 crore, a growth of 35%. Standalone AUM was `86,042 crore and grew by 25%. Standalone PAT rose 83% to `834 crore while PBT was `1,296 crore, an 84% growth. BFL MD Rajeev Jain said this was among the strongest Q1 performance by the company in many years and the portfolio quality remains at a record best.

TCNS Clothing IPO Fully Subscribed On Day2

The initial public offering (IPO) of women’s apparel maker TCNS Clothing was subscribed 2 times on Thursday, the second day of the offer, with investors bidding for 2.26 crore shares of the 1.09 crore shares offered. Qualified institutional buyers bid for 6.99 times the shares offered to them, high net worth individuals bid for 0.08 times their allocation and retail investors bid for 0.07 times. TCNS Clothing, which sells its products under W, Aurelia and Wishful brands, had set a price band of Rs 714 to Rs 716 per share for its initial public offering (IPO).

The company plans to raise up to Rs 1,125 crore from its IPO. Kotak Mahindra Capital Company and Citigroup Global Markets are the book running lead managers to the issue. The offer comprises an offer for sale by promoter selling shareholders — Onkar Singh Pasricha and Arvinder Singh Pasricha, apart from investor sellor shareholder Wagner. Anant Kumar Daga, Saranpreet Pasricha, Angad Pasricha, Vijay Kumar Misra and Amit Chand are other selling shareholders. The offer shall constitute up to 25.63% of the post-offer paid-up quity share capital of the company.

TCNS Clothing has over 400 exclusive brand outlets, over 1,300 large format stores and more than 1,300 multi-brand outlets in India and overseas. The W brand, which is a fusion wear brand and grew at a CAGR of 23.3% during fiscals 2016 to 2018, accounted for Rs 485 crore. While revenue from sales of products under brand Aurelia grew at a CAGR of 47.80% during fiscals 2016 to 2018 and accounted for Rs 283.7 crore, Wishful , which is an occasion wear brand and grew at a CAGR of 39.7% during fiscals 2016 to 2018, accounted for Rs 73 crore of revenue.